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A global kick in the pants

Photonics SpectraJan 2009Governmental involvement in alternative energy programs is what it takes to get them off the ground.

Anne L. Fischer, Senior Editor, anne.fischer@laurin.com

Alternative energies are still just too expensive for wide-scale adoption, yet adopt we must to reduce harmful carbon emissions. But how does that happen when costs are so high? Fortunately, governments around the globe are stepping in to give alternative energy the kick it needs in terms of research, investment and installation.

United States, or are they?

In the US, the renewable portfolio standard, which is adopted by states individually, is policy requiring that electricity providers obtain a minimum percentage of their power from renewable sources by a certain date. Currently, 26 states plus the District of Columbia have renewable portfolio standards in place. Three others (Missouri, Virginia and Vermont), instead of setting a binding target, have set voluntary goals for adopting renewable energy. For those states that have standards in place, the percentages of power specified and target dates vary widely. For example, Massachusetts is shooting for 4 percent by the end of this year; California is going for an aggressive 20 percent by 2010, while Connecticut has committed to 23 percent by 2020.

Connecticut is an example of a state where some policy set at the top is trickling down to individual towns. The Connecticut General Assembly adopted a Clean Energy Fund, which, similar to feed-in tariffs in other countries, is funded by the electric ratepayers. The state also has the Clean Energy Communities program, whereby towns that meet qualifying thresholds can receive a free clean energy system (photovoltaic, wind or solar thermal). Once installed, this system serves as an educational tool for the community. To date, 87 municipalities have made the commitment toward clean energy.

Shining on Europe

Germany is not known for its long, sunny days, yet it’s a world leader in solar energy production. The reason is simply the governmental feed-in tariffs. The way feed-in tariffs work is they give producers of solar electricity the right to feed power into the public grid, and producers receive a premium tariff per kilowatt hour over a fixed period of time. One goal is increasing the number of installations to bring down the cost of solar; therefore, tariffs would be reduced each year.

The utilities pay the tariffs for solar electricity generated by new photovoltaic (PV) arrays, and the cost is passed on to all of the electricity consumers. The rationale is that each consumer is helping to move the country away from dependence on a depleting supply of fossil fuels. Of course, up-front costs for materials and installation are a consideration, but in Germany, banks understand that feed-in tariffs are guaranteed for 20 years, so they are more likely to approve these loans.

The effect of the feed-in tariffs is that about 1100 MW of power have been installed in Germany each year; by the end of 2007, this amounted to 3.8 GW. About half the global installations that took place in 2007 were in Germany, with about 30 percent of the PV systems having been installed on residential homes. The European Photovoltaic Industry Association and Greenpeace issued the Solar Generation V 2008 report, which forecasts that by 2012, annual installations in Germany could be as much as 2400 MW.

Not surprisingly, Germany’s PV industry is booming. At the time the report was published, there were about 10,000 companies involved with photovoltaics; 80 of them produced components such as cells and modules. Overall, the PV industry employs more than 42,000 people in Germany.

Spain has somewhat followed Germany’s lead in establishing a feed-in tariff as well as a grants program for off-grid systems. Most of Spain’s installations, unlike Germany’s, are ground-mounted systems, but this may change because the government’s new renewable energy plan has different caps on power, depending on the type of installation. Nevertheless, in Spain the amount of electricity being generated by solar power is increasing. One of the major producers of solar generators, Spain is a leader in the field of concentrated solar from both a research and a production standpoint. The solar market in Spain quadrupled in 2007, with cell production at about 145 MW and module production at 195 MW. According to the Spanish Photovoltaic Industry Association, about 27,000 people were employed in Spain’s PV industry.

Lighting up Asia

Another growing market for solar is South Korea, where the government has set a goal of 1.3 GW in PV by 2012. The country offers the 100,000 rooftop program, feed-in tariffs and other initiatives. The 100,000 rooftop program is an incentive plan to put PV systems on single-family homes and apartment buildings. The government also has mandated that at least 5 percent of the construction budget of any new public building larger than 3000 square meters must be spent on renewable systems, including PV.

In 2007, only one solar cell manufacturer existed in South Korea. Producing 25 MW of PV cells, it has an annual production capacity of 36 MW. About 1600 people were employed in the PV industry at that time.

China’s Renewable Energy Law, enacted in 2006, offers a feed-in tariff for building integrated PV and large-scale PV power plants. For off-grid PV systems in rural villages, the government pays the startup costs. The Solar Generation V report forecasts that the cumulative installed PV capacity in China will be 300 MW by 2010. With further growth expected between 2010 and 2020, the capacity should grow to 10 GW. This is despite ongoing problems with the execution of the Renewable Energy Law.

United effort

It may be something akin to asking for world peace, but it seems that, for the sake of the environment, the global community should set common standards and goals. The Kyoto Protocol is a step in this direction, but it is a policy to stabilize greenhouse gas concentrations in the atmosphere, with no direction on how it should be done. If the whole world could agree to a certain level of installed alternative energies by a certain date, then each nation, state, county and neighborhood could have a framework to follow. The closest to this is the European Union’s energy policy, which was enacted in 2005. One motivator is the fact that European Union nations are the world’s leading importers of oil and gas. Key in the policy is cutting greenhouse emissions from all primary energy sources 20 percent in comparison with 1990 levels by the year 2020; cutting carbon emissions from primary energy sources 50 percent in comparison with 1990 levels by the year 2050; a minimum of 10 percent use of biofuels by 2020; the unbundling of supply and generation activities of energy companies from their distribution networks; improving energy relations with the European Union’s neighbors; development of a European Strategic Energy Technology plan; and development of an Africa-European Union Energy Partnership. Other countries are working toward adopting similar policies. With so many governments and groups all nodding in the same direction, perhaps shared ideas and best practices will give a global push to solving the world’s energy needs.